July 27, 2008
The Sacramento Bee on California's Budget Crisis
"Dan Walters: In California budget circles, what goes around, comes ..."
By Dan Walters
Politically, California's great debate over how to close a whopping state budget deficit boils down to an exchange of simple—and probably simplistic—slogans.
To Democrats, California has a "revenue problem"—a tax system that doesn't produce enough dollars to meet the state's legitimate needs—and should solve it by raising taxes by $8-plus billion a year, primarily income taxes on business and high-income families.
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But to Republicans, the deficit is the symptom of a "spending problem" and reducing spending should be the first step, although they are not being specific on what should be cut.
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The only semi-objective way to approach the issue is to compare California with other states, even if such comparisons, either in the aggregate or in specific categories, cannot account for this state's unique factors, which are, because this is California, copious.
There was a time when California was, in comparison with other states, high-taxing and high-spending. We routinely held the No. 5 to No. 7 spot in the Tax Foundation's annual calculation of tax burden data from the federal government. In 1970, for instance, Californians carried the nation's seventh-highest state and local tax load at 11.1 percent of personal income. By 1977, the burden had climbed to 12 percent, and California was in fifth place.
Two years later, in 1979, California dropped to 25th place at 9.2 percent. Why? In 1978, voters passed Proposition 13, which slashed local property taxes, and panicky state legislators cut state taxes as well.
